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10 ways to avoid being scammed in Forex

Forex_scamMany successful forex traders tell their stories of how they started and often those involve at least one example of how they lost hundreds or even thousands of dollars to ruthless scammers. We give you 10 ways to avoid scammers and less than ethical operations.

1. If it looks too good to be true maybe it is better to stay away.

Sites that promise automatic and big profits in no-time should raise your first suspicion. There’s no easy money in this market. Sites that try to sell such products will usually have only one page that showing blinking dollars and no serious explanations. The graphics are usually “loud” and not humble.

2. Talk to people. 

Talk to people at the company you are about to invest with, also ask the company for some client numbers/emails so you can get in touch. Any respectable company will have many happy clients who would be happy to share their experience. If the company is dodging your request… run.

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3. Google the product and add the word scam to the google search.

 If the search results yield many  results containing complaints then perhaps the company is up to no good. There might be competitors trying to harm the company’s good name but most often than not, real people that have already suffered will have complained.

4. Check on LinkedIn

Linked in is the most popular business social network. Searching for the people behind the company in Google will most likely point you to a LinkedIn page in the first few results. If the people behind the venture don’t have a profile on LinkedIn, that’s a problem. If they do, see who recommends them. Solid recommendations will help you feel better.

5. Regulation.

A serious participant in the market will be regulated by at least one authority. The American NFA is the toughest authority (sometimes too tough). A stamp from the NFA, FSA, CFTC or another reputable government regulatory body is a good sign. Companies listed in some exotic island lacking a real address and no regulation look suspicious.

6. Demo account. 

A forex demo account is the basic broker check. If you are looking to buy a trading robot, well try it on a demo, a reputable company should not be hesitant to give a 30 day free trial which you can run on a demo. You need to check it out, don’t put your hard earned cash behind some flashy website.

7. A flashy website 

Generally speaking a good web site does not mean the company will make you money. If they spent more money building a website and advertising it through all possible channels then it is likely they are not going to be a good choice for your hard earned money.

8. ForexPeaceArmy.com reviews.

ForexPeaceArmy or FPA has become the true authority on forex scams. Check for reviews on ForexPeaceArmy. If you see too many negative reviews perhaps it’s best to stay away. Look at FPA’s open cases folders and also scam alerts; there are many companies there that are often being submitted because of unethical business practices. A good FPA rating does not mean a company is 100% safe but a bad rating is sure a sign that you need to stay away.

9. Check out forex trading forums.

There are many unbiased forex forums such as ForexFactory.com. Read people’s comments regarding the service you are about to purchase or the broker you are about to open an account with. If you can’t find anything, log in and ask a question, there are many experienced traders who are willing to give free advice, take advantage of this!

10. Intuition. 

This one is simple. If you get a bad feeling about the people on the other side it is best to trust your intuition and stay away. As you can imagine, the forex industry has many scammers preying on regular folks like yourself. In the movies they say, a person is innocent until proven guilty, we recommend you assume the opposite, that everyone is guilty, and that they need to prove their innocence to you.

We hope you find some value in our advice and that you use those 10 tips to avoid real scammers.

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